PETALING JAYA: Mould manufacturer MQ Technology Bhd (MQ Tech) is acquiring a piece of 7.16-acre land in Klebang, Melaka, through its wholly-owned subsidiary Star Acres Sdn Bhd (SASB), for a consideration of RM19.5mil from property developer Cash Support Sdn Bhd (CSSB).
In a filing with Bursa Malaysia yesterday, MQ Tech said the proposed acquisition was an integral part of its plan to diversify into the property business, as it has seen increasing challenges in its manufacturing business, including intensifying competition which resulted in the group registering losses in the recent few financial years.
“Although the group has recorded profitability based on the unaudited consolidated financial statements for the fiscal year ended Sept 30, 2022, which was mainly due to higher revenue recorded during the financial period under review from the business of manufacturing, we intend to mitigate our reliance on our sole business of manufacturing by diversifying its business to include property, through the proposed acquisition.”
Upon completion of the proposed acquisition, MQ Tech intends to develop two blocks of 27-storey serviced suites, housing a total of 1,000 residential suites and 80 shop lots each.
The company is aiming to complete the acquisition in the third quarter of 2023, pending approval from its shareholders, after which, it intends to submit the proposed development plans, together with the accompanying applications to the relevant authorities.
While the exact gross development value (GDV) and gross development cost (GDC) of the proposed project could not be calculated at this juncture, MQ Tech nonetheless estimates the GDC to be RM200mil and the GDV is approximated at RM275mil, which would give the company a gross development profit of RM75mil.
The proposed development is in fact a derivative from a previous 2016 agreement between SASB and CSSB, with the original plan being the development of a theme park, by the joint-venture company of the two parties named Cash Support Property Sdn Bhd or CSPSB.